You can still create Google documents because they don't take up any storage space. Though all your previous files will stay safe, but you won't be able to store anything new. Synchronising system between your computer's Google Drive folder and My Drive will stop too. The moment you run out of space you won't be able to sync or upload new files either.
Most files in your 'My Drive,' including PDFs, images, videos.
Items that take up most storage space are:
